In 2024, the valuations of coal mining companies experienced a decline to a median revenue multiple of 1.0x and median EBITDA multiple of 4.3x.

The combined market capitalization of the world’s 50 largest mining companies decreased by $126 billion, totaling $1.28 trillion by the end of the year. This downturn was influenced by factors such as the fading copper rally and underperformance in gold stocks.

Despite this overall decline, some companies within the coal sector pursued strategic mergers and acquisitions. For instance, Arch Resources and Consol Energy announced a $5 billion all-stock merger to form Core Natural Resources, aiming to enhance operational efficiencies and strengthen their market position.

Coal Mining Company Valuation Multiples

Coal mining companies typically exhibit lower valuation multiples compared to other industries due to several factors:

• Increasing environmental and societal pressures to reduce carbon emissions.
• Coal prices are subject to significant market fluctuations based on global demand and geopolitical events.
• There is a global shift towards renewable energy sources.
• Investors perceive coal mining as high-risk industry due to health and safety concerns, potential for environmental disasters, and the finite nature of coal reserves.

Out of 103 coal mining and related companies listed on major US exchanges, half of them had revenue above $1 billion.

The median revenue multiple for this dataset is 1.0x, the median EBITDA multiple is 4.3x, and the median PE ratio is 8.3x.

Coal Industry Margins

The median gross margin for coal companies is 28%, the median EBITDA margin is 23% and the net profit margin is 12%. Overall, higher the company’s revenue size, the higher margins they exhibited.

Coal Industry Outlook 2025

With the new US administration in January 2025, the coal industry anticipates a series of regulatory changes aimed at revitalizing domestic coal production.

The administration has signaled intentions to roll back environmental regulations, potentially easing restrictions on coal mining and usage. Industry stakeholders are optimistic that coal will have a bigger role in the energy mix.

Despite potential regulatory support, the coal industry faces significant market challenges. The broader trend indicates a decline in coal-fired power generation. The EIA forecasts a 1% decrease in coal-based electricity generation in 2025, with a slight rebound anticipated in 2026 as coal becomes more competitive with natural gas.

Refresher: Value a company using revenue, value a company using EBITDA.

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